Income Vs car value
Discussion
Thought this could pose an interesting topic!
I've often wondered if people are driving around in cars which are worth more than a years net pay.
Particularly I see some people in my street with cars valued in high 30-40k yet I know what they do for a living be it civil Servents, police, teachers etc
Is this common practice?
My car is worth around 10% of my gross annual income.
I've often wondered if people are driving around in cars which are worth more than a years net pay.
Particularly I see some people in my street with cars valued in high 30-40k yet I know what they do for a living be it civil Servents, police, teachers etc
Is this common practice?
My car is worth around 10% of my gross annual income.
Edited by Edible Roadkill on Sunday 28th October 08:30
My Panda is valued about 1.7% of my net annual salary.
My Subaru repayments are 6% of my monthly take home.
When I bought my Exige S in 2006 the car cost around 36k, which at the time was 100% of my net annual salary.
The difference is that now I have a family to support. I could afford to spend more, but would struggle to justify it.
My Subaru repayments are 6% of my monthly take home.
When I bought my Exige S in 2006 the car cost around 36k, which at the time was 100% of my net annual salary.
The difference is that now I have a family to support. I could afford to spend more, but would struggle to justify it.
As said above its cost of ownership that matters.
Deprecation, or repayments, maintenance, warranty, insurance, tax etc
We currently have 3 cars in our household (and 3 drivers)
For the past 10 years or so I've tried to peg our cost of motoring to about
50% of our mortgage payments,
60% of school fees,
same as we are willing to pay for holidays,
same/ less than personal pension contributions.
This should equate to about 10% of nett (after tax and pension)
In the past 6 months, I've gone from driving a £150k Mclaren, to a £15k mini, salary hasn't changed but the cost of owning the Mclaren went from £500 a month to £2,500 a month.
Deprecation, or repayments, maintenance, warranty, insurance, tax etc
We currently have 3 cars in our household (and 3 drivers)
For the past 10 years or so I've tried to peg our cost of motoring to about
50% of our mortgage payments,
60% of school fees,
same as we are willing to pay for holidays,
same/ less than personal pension contributions.
This should equate to about 10% of nett (after tax and pension)
In the past 6 months, I've gone from driving a £150k Mclaren, to a £15k mini, salary hasn't changed but the cost of owning the Mclaren went from £500 a month to £2,500 a month.
Surely PH can do better than this.
I want some man maths as to why a Porsche 911 costing more than a years gross salary is a thoroughly sensible purchase, that in fact I'd risking my financial future not to buy it.
That people are managing perfectly well with a car worth <5% of yearly income is not what I want to hear.
I want some man maths as to why a Porsche 911 costing more than a years gross salary is a thoroughly sensible purchase, that in fact I'd risking my financial future not to buy it.
That people are managing perfectly well with a car worth <5% of yearly income is not what I want to hear.
Dr Jekyll said:
Surely PH can do better than this.
I want some man maths as to why a Porsche 911 costing more than a years gross salary is a thoroughly sensible purchase, that in fact I'd risking my financial future not to buy it.
That people are managing perfectly well with a car worth <5% of yearly income is not what I want to hear.
If it is just you then do it! You can sleep in your car but can't race your house etc etc. could be dead tomorrow blah blah.I want some man maths as to why a Porsche 911 costing more than a years gross salary is a thoroughly sensible purchase, that in fact I'd risking my financial future not to buy it.
That people are managing perfectly well with a car worth <5% of yearly income is not what I want to hear.
But if you are jeopardising your family's financial security by overspending on an indulgent toy, well, that's a bit of a dick move IMHO.
Mortgage_tom said:
Please explain? Sounds interesting.
It was my second one, my first Mclaren cost me zero in depreciation over the 12 months I owned it, but a warranty service and tracker so give or take £6k in a year.Second McLaren in the first 6 months of ownership was following the same route (I know this because 6 months into ownership (October 2017), I had a few offers close to what I paid for it), adding the accrual for the service and tacker and I'm at £500 a month. (It was still under factory warranty)
In June 2018 I sold it (a further 8 months on), in that 8 months it cost around £24k, made up of depreciation (based on the price I sold it for), 12-month warranty, annual service etc.
So actually closer to £3k a month over the last 8 months of ownership
, versus £500 for the first 6 months.Wilmslowboy said:
It was my second one, my first Mclaren cost me zero in depreciation over the 12 months I owned it, but a warranty service and tracker so give or take £6k in a year.
Second McLaren in the first 6 months of ownership was following the same route (I know this because 6 months into ownership (October 2017), I had a few offers close to what I paid for it), adding the accrual for the service and tacker and I'm at £500 a month. (It was still under factory warranty)
In June 2018 I sold it (a further 8 months on), in that 8 months it cost around £24k, made up of depreciation (based on the price I sold it for), 12-month warranty, annual service etc.
So actually closer to £3k a month over the last 8 months of ownership, versus £500 for the first 6 months.
A depreciation roller coaster!Second McLaren in the first 6 months of ownership was following the same route (I know this because 6 months into ownership (October 2017), I had a few offers close to what I paid for it), adding the accrual for the service and tacker and I'm at £500 a month. (It was still under factory warranty)
In June 2018 I sold it (a further 8 months on), in that 8 months it cost around £24k, made up of depreciation (based on the price I sold it for), 12-month warranty, annual service etc.
So actually closer to £3k a month over the last 8 months of ownership
, versus £500 for the first 6 months.I tend to look at cost per mile above anything else. My M5 cost about 70% of my net annual income new, which is excessive in my mind, but I’ll chop it when it’s done 200k which (assuming it’s still worth £10k) will give me an average depreciation cost of 30p per mile, which is fairly modest. Obviously fuel and other running costs are great but that doesn’t directly relate to the cars value.
Seems to me there are 3 types of car spender...
1. “It’s just transport, I spend the absolute minimum I can to get the safety/reliability/space (delete as applicable) I want”
2. “I really like a nice car/want the neighbours to see one, and so I spend most of my disposable income on it”
3. “I’m a certifiable petrolhead, and spend so much on my car that I have to adjust the rest of my lifestyle accordingly”.
1. “It’s just transport, I spend the absolute minimum I can to get the safety/reliability/space (delete as applicable) I want”
2. “I really like a nice car/want the neighbours to see one, and so I spend most of my disposable income on it”
3. “I’m a certifiable petrolhead, and spend so much on my car that I have to adjust the rest of my lifestyle accordingly”.
Edited by 67Dino on Sunday 28th October 11:49
67Dino said:
Seems to me there are 3 types of car spender...
1. “It’s just transport, I spend the absolute minimum I can to get the safety/reliability/space (delete as applicable) I want”
2. “I really like a nice car/want the neighbours to see one, and so I spend most of my disposable income on it”
3. “I’m a certifiable petrolhead, and spend so much on my car that I have to adjust the rest of my lifestyle accordingly”.
1. Disposable income - car payment = nice things fund.1. “It’s just transport, I spend the absolute minimum I can to get the safety/reliability/space (delete as applicable) I want”
2. “I really like a nice car/want the neighbours to see one, and so I spend most of my disposable income on it”
3. “I’m a certifiable petrolhead, and spend so much on my car that I have to adjust the rest of my lifestyle accordingly”.
2. Income - necessities = car payment.
3. Income - car payment = disposable income.
Edible Roadkill said:
Particularly I see some people in my street with cars valued in high 30-40k yet I know what they do for a living be it civil Servents, police, teachers etc
Are these single people? There's a couple of classroom teachers who drive an X5 and an Evoque, but they're both good looking young women so I imagine have better-off partners or possibly parents. The school secretary drives a full-fat RangeRover. They're all newish - they're not old cars been bought cheap.On the other hand, the head-teacher walks past our house twice a day on his way from and to the bus stop.
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